The key to communications for AIM companies in 2021
As opportunities on the AIM market continue to grow, ensuring you have the right processes in place and communicating your corporate narrative with clarity, cohesion and consistency is more important than ever.
The AIM market, London’s market for smaller growth companies, is thriving. Once regarded as a market for small companies that did not meet main market standards, it is now home to many high-quality growth companies and was the most active growth market in Europe last year. This is reflected in share price performance, with the AIM All-Share index rising 22% over the past year.
AIM is now more broadly accepted by institutional investors, as well as its more traditional retail shareholder base. This is good news for AIM companies – and means it is more important than ever to ensure you have the right internal processes and policies in place and to clearly communicate your corporate narrative. It’s a real opportunity to get your story out there, not only to the investment community but also to reach other audiences, including employees and customers.
Within that remit, there are a number of key issues to think about in communications this year and ensure your narrative really engages with the audience.
COVID-19 continues to be a focus
With the COVID-19 pandemic an ongoing challenge for everyone, companies need to communicate clearly the key risks and opportunities, their short-term response and actions they have taken to ensure longer-term viability. It is also important to explain how you have looked after and engaged with your employees, customers and other stakeholders during this time, to demonstrate your behaviour as a socially responsible business focused on the long-term.
Everyone is talking about sustainability
Many smaller companies have a strong commitment to their people, local communities and the environment but they often struggle to clearly communicate this. We have seen a growing awareness of the need to adopt a more structured approach to sustainability and to develop a clear and concise narrative which resonates with your stakeholders. Initial steps include: identifying those non-financial issues that are most relevant to the business; putting in place a sustainability strategy along with relevant targets and metrics; and communicating the progress.
Bringing stakeholders and Section 172 to life
Most AIM companies took a compliance-led approach to the Section 172 statement in their reporting last year. However, how companies engage with their key stakeholders and build that relationship – whether around employee development and retention, customer satisfaction or ethical supply chains – is an increasingly important element of the corporate narrative. Our white paper ‘Beyond compliance to more authentic reporting’ found that only 21% of AIM 100 companies included consideration of stakeholder views in Board decision-making in their reporting last year. There is an opportunity for companies to use the Section 172 statement to help tell this story, bringing it to life through the use of case studies, and examples of Board decisions taking stakeholders’ views into account.
More insight into governance
Good governance is one of the key factors in managing a company’s reputation and a key focus area for AIM companies, particularly given some of the issues we have seen this year around supply chain management. Disclosure around governance processes and responsibilities has improved since the requirement to report against a recognised governance code came into force two years ago. However, communication is still quite generic and focused on meeting the requirements. There is an opportunity to go further, demonstrating your governance credentials by providing more insight into the Board’s activities and focus areas during the year. For example, you could incorporate interviews with directors on issues such as employee engagement or include case studies on succession planning.
Joining the dots
There are a whole range of ways to engage with your audiences, from the annual report, presentations and press releases to your corporate website, video and social media. You need to think about the most relevant channels and materials to reach each of your audiences and ensure you are telling a clear, cohesive and consistent story across all channels.
We believe that as the status of the AIM market continues to grow, there are great opportunities out there for those companies prepared to take a proactive approach, working hard to build trusted relationships with their stakeholders and communicating progress against their material issues. While there are plenty of areas to think about, the most important thing is to tell an authentic and transparent story.